Weaker Australian and New Zealand Dollars

May 20, 2014

The U.S. currency is 0.7% stronger against the Aussie dollar and up 0.5% relative to the kiwi.  The U.S. dollar otherwise is unchanged against the Swiss franc and Chinese yuan, 0.1% firmer verus the loonie and euro and 0.1% softer against the yen and sterling.

Share prices fell 2.4% in Indonesia, 1.1% in Thailand where martial law was imposed by the army, 0.6% in New Zealand, 0.2% in South Korea and 0.1% in Taiwan.  Japan’s Nikkei closed 0.5% higher, and equities rose by 0.6% in Hong Kong and 0.2% in Australia.  The Paris Cac and British Ftse are 0.5% lower, and the German Dax has lost 0.3%.

The ten-year British gilt yield firmed two basis points, and both the 10-year German bund and Japanese JGB advanced a basis point.

The price of gold retreated 0.9% to $1,292.90 per ounce. WTI oil edged 0.1% higher to $102.72 per barrel.

Minutes from this month’s Reserve Bank of Australia policy meeting said the 2.5% Official Cash Rate is likely to be appropriately accommodative for some time longer and projected in-target inflation for some time, too.  Deputy Governor DeBelle noted that lessening capital inflows could put further downward pressure on the Aussie exchange rate.

Former Fed Chairman Bernanke said that normalizing process of Fed policy (i.e., rising interest rates) will be possible to do even without a diminishing central bank balance sheet.

Sri Lankan central bank repo and reverse repo rates were left unchanged as expected at 6.5% and 8.0%.

Japan’s index of leading economic indicators in March was revised up 0.6 points to 107.1 compared to its preliminary estimate.  That’s still the lowest reading since March 2013.  The index of coincident economic indicators was revised down sharply to 114.5 from 117.0 reported earlier.

Japan’s all-industry index rebounded 1.5% in March after a 1.1% drop in February.  The March level was 0.6% higher than the 1Q average and 3.6% above the March 2013 reading.  Between February and March, service sector activity and industrial output rose by 2.4% and 0.7%, while construction and public administration fell by 1.2% and 0.5%.

Japanese department store sales recorded an on-year decline of 12% in April, the first month with an 8% sales tax (previously at 5%).  Such had soared 25.4% in March.

Final data put the on-year rise in Japanese machine tool orders in April at 48.7%.  This followed a 41.8% increase in March.

GDP in Singapore rebounded 2.3% on quarter in 1Q14 and was 4.9% greater than in the first quarter of 2013.

South Korean producer prices posted monthly and on-year dips of 0.2% and 0.3% in April.

Australia’s index of leading economic indicators stagnated in March after 0.2% increases in both January and February, according to the Conference Board.  A 0.2% rise in the index of coincident economic indicators was only half as much as occurred in February.

India’s index of leading economic indicators jumped 0.7% in April, but the index of coincident economic indicators plunged 0.9%.

German producer prices slid 0.1% in April and posted an on-year drop of 0.9% for a third straight month in April.  Energy prices sank 0.5% on month, while all other producer prices collectively stagnated.

Italian industrial orders recovered 1.3% in March and recorded the same 2.8% 12-month increase as in February.  Italy’s current account swung to a EUR 1.005 billion surplus in March from a 516 million euro deficit a year earlier.  February had seen a 298 million surplus.

British consumer price inflation rose from 1.6% in March to a higher-than-forecast 1.8% in April.  Core CPI of 2.0% straddled the target and was 0.4 percentage points higher than in March.  Retail price inflation stayed at 2.5%, but the core RPIX index edged up to 2.6% from 2.5%.  Producer output prices were unchanged in April from March but 0.6% higher than a year earlier.  Producer input prices fell 5.5% on year (and 1.1% on month) after a 6.3% 12-month decline in March.  The ONS gauge of house price inflation, formerly known as the DCLG index, fell 0.5% in April and recorded a slower 8.0% 12-month advance.

Total Norwegian GDP grew 0.3% on quarter in 1Q, while mainland GDP, excluding offshore oil etc, went up 0.5%, same as in 4Q13.  Consumer confidence in Norway advanced 0.5 points to 16.8 this quarter from a 16.3 reading in 1Q.  In Finland, the seasonally adjusted jobless rate stayed at 8.5% in April.  The unadjusted index fell to 9.0% from 9.5%.

The ICSC index of U.S. chain store sales fell 1.3% last week and posted a 2.4% on-year rise, 1.5 percentage points less than in the prior week.  Like Monday, no monthly U.S. economic data get released today.  Canada will be reporting wholesale turnover.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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